National Grid had to take drastic action yesterday to keep the lights on, resorting to an emergency measure that pays businesses to cut their electricity usage after ageing coal power plants temporarily broke down and wind farms stood idle.
A number of large businesses shut down their air con between 5pm and 6pm yesterday, the first time the scheme, paid for via levies on consumers’ energy bills, had been used since being introduced last year.
It was the first Notification of Inadequate System Margin (NISM) National Grid had issued since February 2012 yesterday (the one before that was in 2009). And it sent wholesale electricity prices spiking wildly: one plant reportedly sold power for £2,500 per megawatt hour, 50 times the normal price.
The fact that this happened on a mild autumn day raises the spectre of what could go wrong during a freezing winter if creaking coal plants were to conk out when the wind has also died.
Aged, polluting coal plants aren’t being replaced fast enough, so the margin between normal electricity usage and spikes in demand is getting narrower and narrower every year. Meanwhile, successive governments have spectacularly failed to come up with a solution, other than George Osborne guaranteeing an astronomical strike price for power from the Hinkley Point nuclear power station, which won’t come online until at least 2023 anyway.
That means situations like yesterday, when power prices soared through the roof, will become more common and blackouts could be on the cards soon. Consumers will have to foot extra cost of covering that volatility, but bills really need to go up substantially to give companies the cash and incentive to invest properly in new power stations.
Ever since Ed Miliband (remember him?) declared war on big energy companies two years ago, putting up bills has been toxic. But they will have to rise, so the industry will no doubt become public enemy number one again. After all, it’s hard to see politicians getting up the gumption to own up to their failure to make sure Britain’s lights stay on.
